Investors hit the sell button over the weekend after a bright US nonfarm payroll report that saw the US add 390k jobs in May. That was 325k higher than economists expected, according to a Bloomberg poll. The report prompted bets on the Federal Reserve’s interest rate hikes. The overnight index swap is priced at a 50 bps hike in the Fed’s next two meetings and an 84% chance of a 50 bps hike in the September meeting. The US dollar stopped its two-week losing streak, rising nearly half a percentage point for the week. Equity responds to tight bets. The Dow Jones Industrial Average fell about 1%.
The Canadian dollar rose for a third week against the dollar. It was inspired by strong oil prices and the rising trend of interest rates by the Bank of Canada. Analysts see the Loonie as a huge uptrend. According to a recent Archyde.com survey, CAD is expected to rise 0.4% against the USD over the next three months. Canada to report April trade data and May jobs figures next week. This can cause price fluctuations in the USD/CAD currency.
WTI and Brent benchmark oil prices rose even as OPEC and its allies moved to boost production by 648k bpd in July and August. However, that failed to allay supply fears in energy markets. Such supply concerns were driven after the U.S. In its larger-than-expected inventory shopping report, the EIA said crude inventories fell 5.07 million barrels for the week ending May 27, better than analysts’ estimates of -1 million barrels.
Elsewhere, New York copper prices rose the strongest since February. Dour production reports out of Chile (a major copper exporter) drive prices higher. It was supported by China lifting restrictions on COVID-19. Although Shanghai’s restrictions have really eased But the situation was still unsafe. Due to the political backdrop of China’s “Zero-Covid” policy, a production report from the National Bureau of Statistics (NBS) revealed that the country’s manufacturing sector continued to contract in May. although slower than the previous month May inflation data is scheduled for June 10, an event that could prove price swings across the market. Because traders measure inflationary pressures around the world.
The euro was set for a key moment this week by the European Central Bank’s policy decision. which will cross the line on June 9. EUR/USD is slightly lower after a two-week increase although block inflation hit its strongest level in 20 years. The bps in July has increased. Lagarde is also likely to outline a plan for a modest 25-bps rate hike in the future. That said, if ECB chiefs signal a more active narrative, it could send the euro higher. Rising Inflation Targets May Support European Currency
US dollar performance vs. performance currency and gold
Basic forecast:
Pound Basics Forecast: UK Government Support Provides Ground for BoE Hiking
of the UK government £Support for 15 billion low-income households bolsters the Bank of England’s rate hike path as it seeks to curb inflation.
Australian Dollar Prepares to Move in RBA, Swing Risks
The Australian Dollar is ready for volatility. The expected mood ahead of the upcoming RBA policy update may increase the susceptibility to seeing risk appetite trends.
Weekly Crude Oil Forecast: OPEC+ US Dollar Supply and Economic Data in Focus
Crude oil could end the week at its highest level. By leaving next week to be open to fundamentals from factors of supply and demand and the recovering US dollar.
US Dollar Fundamentals Forecast: USD May Rebound Even as CPI Cools
The US Dollar weakens after weeks of losses. Traders have US CPI data in focus, but weaker-than-expected print is unlikely to reduce the Fed’s odds. That could give the US dollar a solid backing.
S&P 500 forecast for next week: Inflation data to make or break markets
US inflation report May will be a key figure for the S&P 500 next week. For the confidence to be significantly improved The data must show that inflationary pressures are easing rapidly.
Gold Price Outlook: XAU/USD May Fall as Market Turns to Hyperinflation
Gold prices remain fragile after a strong U.S. nonfarm payrolls report underscores Fed’s confidence in the economic outlook. All eyes are on the next US inflation report.
Technical forecasts:
Euro Technical Forecasts: EUR/USD Defends A Fall – But How Long?
The euro surged more than 4.2% from its annual low against the dollar, with EUR/USD eyeing technical bearish resistance. Key levels in weekly charts
S&P 500, Nasdaq 100, Dow Jones Forecast for Next Week
It appears the stock still has some upside left, which is a bearish bounce.
AUD/USD May Rise to Test 50-Day SMA for First Time Since March
A breakout of the May high (0.7266) triggered a further rally in AUD/USD as it tested the 50-day SMA (0.7227) for the first time since March.
US Dollar Technical Forecasts: EUR/USD, GBP/USD, AUD/USD, USD/JPY
The US Dollar finally found some support after two weeks of selling. But next week, inflation data will be used. And the next week the Fed brought in the data. Buckle up for the busy economic calendar ahead.
— Written by Thomas Westwater, analyst at DailyFX.com.
To contact Thomas, use the comments section below or @FxWestwater on twitter
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